$15,000 Gold: A Series of Repricings Rather Than a Single Explosion

Forecasting gold prices often begins with gold itself, but that may be the wrong approach. Gold's value doesn't change - it remains an ounce regardless of price fluctuations. What changes is the perceived quality and quantity of currency required to buy it.

The article suggests that instead of asking how gold could reach $15,000 an ounce, we should consider what would need to happen to the value of money for such a price to be possible. A 240% increase in five years or 13% annual growth over ten years is not impossible, especially considering gold's history of violent repricings during times of financial stress.

Several trends are already underway that could drive the price of gold higher: government debt is expanding, inflation remains high, interest costs consume a growing proportion of government revenue, and central banks continue to diversify their reserves. The article also notes that sovereign bonds may lose some of their safe-haven status as investors become increasingly cautious.

The journey to $15,000 might look more like a series of repricings rather than a single explosion. The first repricing could occur when governments realize they cannot repay their debts in money of today's value and resort to repaying them with inflation-adjusted currency.